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Wealthfront and Betterment are two well-established companies that have been integral in the formation, and ongoing development, of the robo-advisor industry. Both companies are among the winners in our list of the best robo-advisors of 2023, with Wealthfront winning best overall, best for goal planning, best for portfolio construction, and best for portfolio management, while Betterment is best for beginners and best for cash management.
On the surface, Betterment and Wealthfront look similar, but there are some key differences. Betterment is a good option for beginner investors, as they can start investing with a $0 account minimum. The company gives investors access to customer service and human financial advisors for an additional fee but also offers a premium version that includes unlimited access to human advisors. Wealthfront, by contrast, requires a $500 minimum investment and offers a fully digital financial planner without any human touch, making it a better choice for investors looking for a hands-off approach.
- Account Minimum: $500
- Fees: 0.25% for most accounts; no trading commission or fees for withdrawals, minimums, or transfers
Key Takeaways of Wealthfront
- Great for those looking to customize their portfolio with additional ETFs and cryptocurrency funds
- Access to a portfolio line of credit for those interested in a loan
- Single stock and risk parity portfolios are available for clients with more than $100,000
- Account Minimum: $0, $10 minimum to start investing. Crypto minimum $50. $50 minimum for rebalancing.
- Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets for Betterment Premium account holders with unlimited access to certified financial planners. Crypto accounts are charged a monthly fee of 1% plus trading expenses. There are no management fees for Betterment Checking or Cash Reserve. For accounts with at least $2 million, there is a fee discount of 0.10% for balances greater than $2,000,000.
Key Takeaways of Betterment
- Great for beginners due to no account minimum
- Certified financial planners accessible to all users for an additional fee
- Sustainable, income, and cryptocurrency portfolios available
Account Setup
Betterment
Betterment’s account setup is smooth—just input your name, email, and password, and then complete basic profile information, including your name, address, and Social Security number. After creating an account, you can complete the brief goals, timeline, and risk questionnaire. The platform provides investment portfolios comprised of diverse U.S. and international stock and bond ETFs and recommends an allocation based on your responses to the initial quiz.
While Betterment does recommend a portfolio based on answers to questions during account setup, investors are still able to adjust their investment portfolio’s specific asset class weights for further customization.
There’s a $10 minimum deposit required to fund the account, so you can get started investing with small dollar amounts. You can also view portfolio options before funding, which is a plus. Investing plan clients can purchase low-fee financial planning packages, while Premium users with $100,000 or more have unlimited access to certified financial planners at no additional cost. Phone customer service representatives are available to help with questions.
Wealthfront
At Wealthfront, you can create an account, take the initial questionnaire, and view potential portfolios by inputting your name, email address, phone number, and password. Wealthfront will recommend a core portfolio, informed by your responses to the initial quiz, without requiring potential users to input a Social Security number. The recommendation will be comprised of diverse U.S. and international stock and bond ETFs, as well as a real estate investment trust (REIT) fund. You can also view other investment portfolio options before funding your account.
Wealthfront requires a $500 minimum investment and only offers a digital financial planner—no human advisors. That said, customer service representatives all have a minimum of Series 7 investment licenses. Customers can customize premade portfolios from a choice of 239 investments, 17 asset classes, and 2 cryptocurrency trusts. All account holders, even those who haven’t funded their account, can use Wealthfront’s free and comprehensive goal-planning tools.
Account Setup Verdict: Wealthfront
While both Betterment and Wealthfront have smooth account setup processes, Wealthfront has the edge in this category because you can get a deeper preview of the platform and your suggested portfolio without providing your Social Security number. Additionally, anyone can use Wealthfront’s comprehensive goal-planning tools without investing.
Account Types
Betterment
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- 401(k) rollover IRA
- SEP IRA
- Trust
- 529 college savings plan (only available through an employer)
- Cash reserve and checking
Wealthfront
- Individual taxable
- Joint taxable
- Traditional IRA
- Roth IRA
- 401(k) rollover IRA
- SEP IRA
- Trust
- 529 college saving plan
- High-interest cash
Account Types Verdict: Tie
Both Betterment and Wealthfront offer the typical account types, including cash management, but neither offers custodial accounts. 1 Wealthfront previously had an edge with its 529 college savings account, however, Betterment recently added this feature. The main difference is that Betterment’s 529 plan is only available through an employer via Betterment at Work, whereas Wealthfront’s is a regular account offering.
Account Services
Cash Management
Betterment offers two account types for fee-free cash management: checking and Cash Reserve accounts. The Cash Reserve account is a high-yield cash account, currently offering 5.00% APY and an introductory rate of up to 5.5% APY for new customers for the first three months. The checking account includes a Visa cashback debit card and ATM fee reimbursement in the U.S. and internationally. There are no overdraft fees or minimum balance requirements. The company also offers automatic sweeps into an FDIC-insured bank sweep account.
Wealthfront offers a high-interest cash account with no minimum balance and $0 fees, currently paying 5.0% APY. Investors have access to a debit card and can get cash from over 19,000 ATMs nationwide fee-free. Additionally, Wealthfront offers up to $8 million in FDIC insurance through partner banks.
Account Services Verdict: Tie
Overall, Wealthfront and Betterment are evenly matched in terms of cash management, but for different reasons. Betterment has two choices for your cash management and ATM fee reimbursements and offers a slightly higher interest rate for new customers. Wealthfront has a large ATM network along with the ability to pay bills with its cash account while investors will enjoy paying $0 in fees.
Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Checking accounts and the Betterment Visa Debit Card provided and issued by nbkc bank, Member FDIC. Checking made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of their affiliates, is a bank. Betterment Financial LLC reimburses ATM fees and the Visa 1% foreign transaction fee worldwide, everywhere Visa is accepted.
Goal Planning
Betterment
At Betterment, clients can set up multiple goals and enable distinct asset allocations in line with the goal type and time horizon. Betterment gives investors the option to set potential timelines for the following goal types:
- Major Purchase
- Education
- Retirement
- Retirement Income
- General Investing
- Emergency Fund
Additionally, investors can set goals within their cash and crypto accounts as well. Based on the expected time horizon–except for the Emergency Fund, which doesn’t have a predictable timeline–Betterment will recommend an asset allocation specific to your goal.
Wealthfront
Wealthfront’s goal planning is integrated with its excellent Path digital financial planning tool. This goal planning tool is completely free, and you don’t even have to invest with Wealthfront to access it; however, you do need to enter your personal information. The company also offers the ability to link your accounts in order to get a comprehensive picture of your current financial situation and run scenarios on future financial goals to see how one goal will affect another and the tradeoffs that may need to take place.
Goal Planning Verdict: Wealthfront
While both platforms excel with goal-planning tools, reporting, and scenario analysis, Wealthfront takes this category due to its more comprehensive analysis of all your synced data to determine your current financial health. Investors will also appreciate the Path feature and find it to be an incredible tool.
Portfolio Construction
Both Betterment and Wealthfront employ modern portfolio theory (MPT) principles, yet each digital investment advisor modifies the low-fee, diversified ETFs in its core portfolios to suit specific investment research theories. They each offer core portfolios, sustainable ESG options, and additional customization options through flexible portfolios.
Betterment
Betterment’s portfolios are constructed of ETFs comprised of the following asset classes:
Equities
- U.S. equities
- International developed market equities
- Emerging market equities
Bonds
- U.S. short-term treasury bonds
- U.S. inflation-protected bonds
- U.S. investment-grade bonds
- U.S. municipal bonds
- International developed market bonds
- Emerging market bonds
While Betterment does implement the general principle of modern portfolio theory, there are some asset classes that the company has chosen to exclude: commodities, natural resources, and REITs. However, Betterment does provide investors with exposure to additional asset classes, including commodities, high yield bonds, and REITs, with Flexible Portfolios.
Wealthfront
Wealthfront has created two sets of portfolio allocations–one for taxable accounts, and one for retirement accounts. Each type of allocation contains 20 portfolios with differing levels of portfolio volatility. Assets that comprise these portfolios fall under three broad categories: stocks, bonds, and inflation assets.
Asset classes include ETFs from the following categories:
- U.S. stocks
- Foreign developed market stocks
- Emerging market stocks
- Dividend growth stocks
- U.S. bonds
- U.S. corporate bonds
- Emerging market bonds
- Municipal bonds
- Treasury inflation-protected securities (TIPS)
- Real estate
- Commodities
Available Assets
| Betterment | Wealthfront | |
| Individual Stocks | No | Yes—portfolios worth more than $100,000 are eligible for direct stock indexing to replace U.S. stock ETFs |
| Mutual Funds | No | No |
| Fixed Income | Yes—ETFs | Yes—ETFs |
| REITs | Yes—only in flexible portfolios | Yes |
| Socially Responsible or ESG Options | Yes | Yes |
| ETFs | Yes | Yes |
| Non-Proprietary ETFs | Yes | Yes |
| Forex | No | No |
| Crypto | Yes | Yes |
Portfolio Customization
Betterment
Betterment’s overall account offerings now include exposure to cryptocurrency and you can use Flexible Portfolios. Flexible Portfolios allow you to tweak asset class weightings and access other asset classes that aren’t in the Core portfolio, including commodities, high-yield bonds, and REITs. Unlike Wealthfront, Betterment doesn’t provide customers the opportunity to add individual ETFs to their portfolios, nor direct stock investments.
Wealthfront
Wealthfront gives investors the ability to build and automate their investment portfolio. Investors can choose from recommended portfolios, adjust the recommendations, build their own portfolio, or transfer their portfolio over from another brokerage firm. Wealthfront also offers investors the ability to automate features such as tax-loss harvesting, intelligent dividend reinvestment, and tax-sensitive rebalancing. Additionally, investors can choose from hundreds of funds in categories such as clean energy, tech, crypto, and ESG.
Portfolio Customization Verdict: Wealthfront
Although Betterment has upped its game in this area, Wealthfront still has the edge when it comes to portfolio customization.
Portfolio Management
Betterment
Betterment’s algorithms check for portfolio drift. Portfolio rebalancing will occur automatically with each cash inflow or outflow. When you deposit cash into your account, the money will be used to buy asset classes that are underweight; likewise, when cash is withdrawn from your account, Betterment will sell asset classes that are overweight. If no cash is flowing in or out of the account, rebalancing will automatically occur once your portfolio drifts 3% from the targets.
Wealthfront
Wealthfront monitors your portfolio daily and rebalances when there are significant differences between your desired asset allocation and the actual asset class balance. However, there are no specific parameters based on time or percentage of portfolio drift that trigger a rebalance, so it can be unclear for investors exactly when this will take place.
After linking your accounts, the Path digital financial advisor can use all of your investment information to project your finances and net worth over time and make recommendations regarding spending, saving, and investing.
Portfolio Management Verdict: Tie
Both Wealthfront and Betterment offer regular rebalancing, although Betterment offers clear guidelines as to when portfolio rebalancing will occur, while Wealthfront does not. This is a personal preference that investors will want to take into account; however, this category remains a tie.
Tax-Advantaged Investing
Both Wealthfront and Betterment offer tax-loss harvesting for taxable accounts while making sure to avoid wash sales. This process minimizes taxes by selling losing investments to offset capital gains and income. Wealthfront and Betterment both have frequent automated tax-loss harvesting to gain the greatest financial benefit from the strategy. Here again, the two digital investment advisors are tied.
Betterment is not a licensed tax advisor. Tax Loss Harvesting+ (TLH+) is not suitable for all investors and is subject to certain conditions. Read more at https://www.betterment.com/legal/tax-loss-harvesting and consider your personal circumstances before deciding whether to utilize Betterment’s TLH+ feature. Investing involves risk. Performance not guaranteed.
Key Portfolio Management Features
| Betterment | Wealthfront | |
| Automatic Rebalancing | Yes—when assets veer above or below the selected asset allocation by 3% | Yes—monitored daily, rebalanced when assets drift from the target by large amounts |
| Reporting Features | Monthly and tax statements; goal progress viewable online | Monthly and tax statements; goal progress viewable online |
| Tax Loss Harvesting | Yes | Yes |
| External Account Syncing/Consolidation | Yes—automated updates and only available for analysis | Yes—automated updates and only available for analysis |
Security
Betterment
Betterment offers high levels of data and identity protection to investors, including:
- TLS data encryption
- Two-factor authentication for logging in
- Biometric authentication for mobile devices
- Limited data access for employees
- Fraud protection procedures
- Protected password storage for third parties
- Dedicated, in-house security team
Additionally, Betterment offers investors FDIC and SIPC insurance:
- Cash Reserve accounts are eligible for up to $2 million ($4 million for joint accounts) of FDIC insurance ($250,000 insurance per program bank)
- Checking accounts are FDIC-insured up to $250,000 for individual accounts and $250,000 per depositor for joint accounts
- Investment accounts include $500,000 of SIPC insurance for missing funds, with $250,000 for cash claims
Wealthfront
Wealthfront offers the following security to platform users:
- Two-factor authentication
- Scanning for unusual behavior related to transactions and linked accounts
- Limited data access for employees
- Internal security team that evaluates risks across Wealthfront’s platform
In addition, Wealthfront also offers FDIC and SIPC insurance to investors:
- Wealthfront Cash Accounts are eligible for $250,000 coverage from a single financial institution, up to $8 million of FDIC insurance for cash deposits from multiple partner banks
- SIPC insurance covers your investments up to $500,000
User Experience
Desktop
Betterment and Wealthfront each offer easy-to-navigate websites, as you might expect from these legacy digital investment managers. Users can access most features with one or two clicks from the dashboard and can monitor and adjust goals from there as well.
Mobile App
Betterment
Betterment offers both iOS and Android apps for mobile users. Reviews on Google Play give the app a high rating of 4.7 stars and Apple users come in even better with a 4.7-star ranking. This all-in-one app allows users to have access to all of the Betterment accounts under a single login, as well as have all the capabilities that desktop users have.
Wealthfront
Wealthfront also offers both iOS and Android apps for mobile users. Reviews on Google Play and Apple come in even higher than Betterment, scoring a 4.9-star ranking on Google Play and a 4.8-star ranking on the App Store. The simplicity of use and access to all accounts under one login gives investors the mobile experience that they are looking for on the go.
Customer Service
At Wealthfront, the phone customer service number is less publicized and there is no online chatbot. Overall, we found Betterment’s customer service to be a notch ahead of Wealthfront’s.
| Betterment | Wealthfront | |
| Phone & Email Available | Yes, 718-400-6898, weekdays, 9 a.m. to 6 p.m. ET | Yes, technical support is available on weekdays at 877-910-4232, 7 a.m. to 5 p.m. PT |
| Pre-funding phone consultation with a certified advisor | Yes, for investors with a $20,000 minimum investment | N/A |
| Online chat available | Yes—available for prospective clients, virtual assistant bot only | No |
| Website FAQ section | Yes—comprehensive | Yes—comprehensive |
Fees
Betterment
Pricing at Betterment starts out at $4 per month for the basic digital investing account, with no minimum balance requirement. Once an investor has reached a $20,000 balance (across all Betterment accounts, including investing, crypto, Cash Reserve, and checking accounts), or committed to set up recurring deposits of $250 per month, the account fees will automatically switch to a 0.25% fee annually. Investors also have the option of selecting a Premium plan once they have a total balance of $100,000 across all Betterment accounts; this plan is 0.40% annually and gives investors access to unlimited advice from a team of Certified Financial Planners.
Additionally, Betterment offers Cash Reserve and Checking accounts, $0 fees, and no minimum balance required. Crypto investment accounts are also offered for a 1% annual fee plus trading expenses, with no minimum balance required.
Wealthfront
The basic fee structure for Wealthfront is straightforward and simple–0.25% of assets under management (AUM). Wealthfront does not charge commissions; however, there are a few miscellaneous fees for debit cards and ETF expense ratios.
| Category | Betterment | Wealthfront |
| Management Fees for $5,000 Account | $12.50 (with a $250 recurring monthly deposit) | $12.50 |
| Management Fees for $25,000 Account | Investing: $62.50 | $62.50 |
| Management Fees for $100,000 Account | Investing: $250 Premium: $400 | $250 |
| Termination Fees | $0 | $0 |
| Expense Ratios | Core portfolios average between 0.05% to 0.13%, depending on your allocation | Average 0.08% |
| Mutual Funds | N/A | N/A |
The Bottom Line
Both Betterment and Wealthfront offer easy-to-use robo-advisor platforms. However, the nuanced details are where potential investors will find the differences. Investors who are just getting started and have little to invest, or who value the access to a chatbot or the ability to call customer service to answer questions, will likely find Betterment the preferable choice, due to the $0 minimum account balance and access to live customer service. Pricing, however, is not necessarily straightforward and can be a bit convoluted.
Wealthfront does provide simple pricing, at 0.25% management fees across all account levels, but does require a $500 minimum investment. While the company does not focus on providing the human element when it comes to customer service, it has made it quite easy for the do-it-yourself investor to set up an account and run investment scenarios through its financial planning tool, Path
Can I Lose Money at Betterment or Wealthfront?
Yes. When investing in financial markets, your account value goes up and down with the market value of the investments. If you sell with a drawdown in your account, you will lose money. Historically, over decades, the returns on a well-diversified portfolio have been positive. The portfolios constructed by both Wealthfront and Betterment are meant to show positive growth over time, but they can experience periods of negative returns depending on when they were funded and how the market has performed since.
Does Betterment or Wealthfront Have Better Returns?
The returns for each platform depend upon when you invest and which portfolio you choose. It is difficult to compare returns in a head-to-head comparison. In general, digital investment managers have returns that align with those of the ETFs included in the portfolio. More aggressive portfolios at either robo-advisor will have generally higher returns than the more conservative ones, but they also come with more risk.
How We Review Robo-Advisors
Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8 to Feb. 9, 2024.
We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:
- Goal Planning – 21.00%
- Portfolio Contents – 17.00%
- Portfolio Management – 17.00%
- Fees – 15.00%
- Account Services – 10.00%
- Security & Education – 5.00%
- User Experience – 5.00%
- Account Setup – 5.00%
- Customer Service – 5.00%
Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing. Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.
Read more about how we research and review robo-advisors.
Separately, our research team conducted a survey of 205 U.S. adults aged 18 to 72 who are current clients of one of 18 robo-advisors. While the information collected did not influence the development of our ratings model, it was instrumental in gathering the valuable insights published in Investopedia’s 2023 Robo-Advisor Consumer Survey.
Participants in our 2023 Robo-Advisor Survey opted in to an online, self-administered questionnaire from a market research vendor. Data collection took place between Aug. 30 and Sept. 15, 2023, with 11 video interviews conducted with volunteer respondents from Sept. 7 to Sept. 17, 2023. Multiple quality checks, including screeners, attention gauges, comprehension evaluations, and logic metrics, among others, were used to ensure only the highest quality responses were included.
The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and only suitable for investors who are able to bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender and are not backed by the U.S. government. Digital assets are not subject to FDIC insurance or SIPC protections.
Dotdash Meredith receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. Dotdash Meredith is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.